Richard Chin - CEO Denise Bevers - President, COO Wendy Wee - CFO Katja Buhrer - VP Corporate Development, IR

Brandon Folkes - Cantor Fitzgerald Ben Haynor - Alliance Global Partners Nathan Weinstein - Aegis Capital Andrew DeSilva - B. Riley FBR

Thank you, operator. Good afternoon and welcome to our first quarter 2019 financial results call.

Joining me today from the Management Team of KindredBio are Denise Bevers, our President and COO; Wendy Wee, our CFO; Katja Buhrer, our VP of Corporate Development and Investor Relations. We have made substantial progress in Q1 of this year.

While our sales to distributors or move in were lower than in Q4 of last year, the sales from distributors to the clinics or move out show good growth. I should note that at an early stage of the launch it is not uncommon to have significant variability in sales from quarter to quarter.

While it's still too early to make projections, key metrics namely; awareness; penetration; reorder rate; and move out to clinics are tracking favorably alongside continued positive customer feedback. These metrics are all consistent with the product that's on its way to becoming a successful feline drug.

We're seeing the desired effect from our commercial strategies and believe that it's a matter of when not if these results flow through to sales. It often takes time to change veterinary practice habits, so we need to be patient but we're confident that Mirataz will reach our internal peak sales goals.

As a reminder, we previously said that we expect most of our drugs to reach between $10 million to $100 million in peak sales with certain biologics predicted to eclipse that range. We are comfortable that Mirataz peak sales will fall into the mid range of that $10 million to $100 million.

This would make it a successful feline drug and represent an outstanding ROI given it cost us approximately $5 million should develop it. As the launch matures, we'll provide more specific guidance regarding peak revenue expectations.

As we disclosed in our press release today, we expect to be able to provide more clarity on the extent to which additional data will be needed to obtain European approval of Mirataz following our oral hearing with the European Medicines Agency in September. As we're excited as we are by Mirataz, our pipeline is even more impressive.

Looking to the year ahead, we have tremendous news flow; this includes multiple pilot study readouts and the initiation of three pivotal studies certain of which have blockbuster potential. We also anticipate our second approval in the next month providing further validation of our capital efficient business model.

We hope to bring dipyrone IV for which FDA approved the trade name Zimeta IV to the equine community in the second half this year. There are eight to nine million horses in the United States and currently more than 1 million are seen by a veterinarian for fee for annually.

Not all of those are treated because the only options available are NSAIDs off-label and those have safety risks. Turning to our IL-31 and sync programs we are even more excited because we've been getting additional inbound inquiries from other veterinary companies about our atopic dermatitis candidates since the positive results earlier this year.

This is consistent with our view that these molecules have blockbuster potential. According to the latest figures, the dermatitis market is greater than $600 million in annual sales right now and continuing to grow, the market is not fully penetrated yet by any means and let's keep in mind that atopic dermatitis is only a subset of the diseases and conditions that cause itching in dogs.

We continue to believe that the more generally favorable safety benefit profile and the economic alignment with veterinarians will drive the majority of the dermatitis and inching market towards biologics. We're pleased to announce that we'll be initiating our I/O 4/13 sync pilot study in the coming weeks and as a reminder it addresses the disease itself rather than just the itching.

We know that dupilumab which blocks IL-4 and IL-13 has been approved for topic dermatitis in humans and it is doing very well in the market. We believe that IL-31 and SINK may become both very successful products.

But beyond dermatitis, the companion animal factor has been evolving rapidly and we think we'll see other products that approach human product like revenues. So, as I said before, we believe we're going to see multiple products in the industry that sell in the several $100 million range especially biologics across multiple diseases.

Now turning to financials, we have always been judicious about our cash burn and we have been working diligently to control our burn rate. As Wendy will discuss, we are lowering our OpEx guidance for this year.

I should note that 2019 expenditures reflect combination of a number of milestones for KindredBio and our goal is to lower our pipes in the future years. For example, we're preferring to launch our second product this year realizing the value of pipeline by advancing core programs and final stages of development and completing the build-out of Arkansas biologics our manufacturing plant this year.

We have also been exploring several promising non-diluted financing and revenue opportunities. For example, we've had quite a bit of interest in our biologics and fill and finish capacity.

There is more demand than supply for both of these right now and we're fortunately in a position to meet some of that demand with our state-of-the-art manufacturing facilities. So, we're exploring the possibility of monetizing some of our capacity.

In addition, there is a very strong need and desire for innovative products on the part of larger veterinary companies as reflected by the read-in M&A trend in industry which includes the acquisition of Aratana by Elanco. I just hope for happens that we have one of the most promising and broadest pipeline in the companion animal space including what we believe to be the largest antibody pipeline.

We are exploring partnering on some of our pipeline candidates that we currently can't put as a development given our resources and we believe a partnership could bring a meaningful non-dilutive financing. Thank you for your continued support.

I will now turn the call over to Denise.

Thank you, Richard. On today's call, I will provide an overview of Mirataz's first quarter performance together with key pipeline updates.

While we're disappointed with the first quarter variability in sales resulting in a $0.5 million in Q1, we continue to believe that Mirataz will be a successful feline drug. That confidence is underpinned by several factors.

First, the response from veterinarians remains uniformly positive, so we know this is a product that both practitioners and cat owners like. Second, across key metrics such as penetration reorder rate and move-out sales from distribution into clinics, Mirataz is tracking favorably.

While we've always known that the penetration into the veterinary market is clinic-by-clinic and even veterinarian-by-veterinarian within those clinics, we also know that ramp is governed by the size of the sales team. In our case, we have a small but mighty sales team of 25 field specialists which represents a deliberate decision to balance investment in our commercial organization with the advancement of our exciting pipeline that contains numerous candidates with blockbuster potential.

As such, we believe that it will take longer than we originally anticipated to change practice patterns resulting in a slower ramp to peak sales. Post launch, we've been able to analyze different adoption patterns among the veterinary community more broadly.

What we're finding is while many veterinarians and hospitals have made the switch from oral human generic mirtazapine pills to Mirataz in full, others are taking longer to change protocol; meaning they're still using both human generic mirtazapine and Mirataz as they get familiar with Mirataz and adjust their hospital protocol accordingly. That's why we're substantially increasing the number of educational programs involving our thought leaders and our KindredBio professional service veterinarians and sales specialists at both the corporate and local clinics.

Because of the associated lead time with some of these initiatives, we expect results from these activities to benefit uptake in the second half of this year. Additionally, now that we've penetrated over 10,000 of the 25,000 veterinary clinics in the United States, we've initiated our direct-to-consumer campaign in the second quarter along with a robust digital media push.

I should mention that this campaign was intentionally staged to ensure that veterinarians had a level of familiarity and experience with Mirataz prior to receiving queries from consumers regarding the product. So, as you can see we remain confident in Mirataz's commercial prospect, our initiatives to drive uptake and the appeal of a transdermal treatment for unintended weight loss in cats.

Turning to Mirataz EU, in April we received a request for further information from the EMA following their review of our responses to the first round of queries. The EMA's response included a request to discuss the submission at an oral hearing which has been scheduled for September of this year.

The outcome of the oral hearing will determine the extent to which additional data may need to be generated to obtain European approval for Mirataz. As Richard mentioned, 2019 is a catalyst rich year for KindredBio.

In the next month we hope to receive approval of Zimeta IV pending a positive outcome from the API manufacturers response to the findings identified during the FDA's recent inspection. This drug which is for the control of fever in horses is used widely in other countries and U.S.

equine veterinarians have been eagerly anticipating it. While the equine market is typically smaller than canine and feline markets, it is nonetheless attractive given high willingness to spend little competition and high concentration.

The market also lends itself to lower commercialization marketing and sales investment. Given that there are a little over 4,000 equine-only veterinarians in the country, we plan to commercialize with a specialized direct salesforce in conjunction with distribution and expect this product to be highly profitable.

Regarding dipyrone oral, we have agreed on a password with the FDA and bridging studies will likely commence in 2020. This proprietary oral gel is intended as a leave behind for owners to administer to their horse for continued care following dipyrone injection.

Accordingly, we expect it to expand the use of dipyrone and build upon the overall use of dipyrone injection. Turning to our biologics pipeline specifically canine atopic dermatitis, we expect results from our pilot field effectiveness study of KIND-016 a fully canineized high-affinity monoclonal antibody targeting interleukin-31 in the third quarter with a pivotal study expected to commence by year-end.

We also anticipate pilot effectiveness results for our canine anti-IL-4/13 SINK molecule in the second half of this year. This candidate is expected to decrease the inflammation and truly address the disease.

So, we have a full spectrum upstream/downstream of product candidates that will satisfy different stages of the disease and that's really exciting. Our feline erythropoietin for the control of non-regenerative anemia in cats is also moving ahead nicely.

We plan to initiate the pivotal effectiveness study for this product candidate before year end. I am pleased to announce that we have successfully completed our first cGMP drug substance manufacturing runs at our plant in Burlingame, California, which is a significant milestone for KindredBio and cGMP fill and finish will be undertaken at our biologics manufacturing facility in Elwood Kansas for this product.

As a reminder, this product candidate has been engineered by KindredBio to have a prolonged half life compared to endogenous erythropoietin; a protein that regulates and stimulates production of red blood cells. EPO was a very complicated protein to engineer as you may know from the human side.

The more difficult and challenging the more exciting it is to us because it creates a barrier to entry for other companies. Chronic kidney disease which often causes anemia affects approximately half of older cats making it a leading cause of feline mortality and human erythropoietin's which are multibillion dollar products in the human market have been shown to be immunogenic in cats.

So, we think this product candidate could have appealing revenue potential. The pilot field effectiveness study is underway for our anti-TNF antibody targeting canine inflammatory bowel disease and we expect to read out by the end of 2019.

IBD can affect dogs at any age but is more common in middle age and older dogs and as we've discussed in the past because this is an indication that significantly affects the quality of life of both the dog and its owner, we believe this also has the potential to be an attractive market opportunity. Regarding KIND-014 for the treatment of gastric ulcers in horses, we have selected a formulation for development and both the pivotal field effectiveness and pivotal safety study will begin in 2019.

Equine gastric ulcer syndrome is a common condition in horses and is estimated to affect 60% to 90% of adult horses, so this has the potential to be a meaningful equine drug. Another key milestone for KindredBio this year is the commissioning of our biologics manufacturing plant in Elwood Kansas.

We knew when we started the company that we had to invest the money to be an end-to-end drug development and manufacturing company and now we've done just that. this is really going to separate us as a company because if you have to outsource biologics manufacturing or try to compete with human drug companies that have manufacturing campaigns for multibillion dollar human products, it will be very hard to get a campaign slot and it will be very costly.

We're building the Kansas facility very intelligently. Construction to support our initial production lines is on track to be completed by mid-year and we have the ability to grow and add on biologics in lockstep with our portfolio.

In summary, we remain confident in the market potential for Mirataz over the long-term, we believe our commercial strategies will have the intended effect and it's a matter of when not if these results flow through to sales. Alongside an expansion in Mirataz sales, we expect to see a second FDA approval, pilot results across key pipeline candidates and the initiation of three pivotal studies as well as the commissioning of our Kansas biologics manufacturing facility further driving value in KindredBio.

With that, I will now turn the call over to Wendy for a review of our first quarter 2019 financials.

Thanks, Denise. I'll start with a summary of our first quarter financial performance before providing an overview of our capital position and expectations going forward.

For the quarter ended March 31st, we reported a net loss of $16.1 million or $0.42 cents per share as compared to a net loss of $10 million or $0.36 per share for the same period in 2018. As Denise mentioned, we recorded $0.5 million in net product revenues for Mirataz in the quarter.

Because Mirataz became commercially available last July, there were no product revenues in the year-ago period. The cost of product revenues totaled $92,000 resulting in a gross margin of 82%.

Research and development expenses were $7.2 million in the first three months of the year compared to $5.3 million for the same period in 2018. The $1.8 million year-over-year increase was primarily due to higher headcount and related expenses as we advance our biologics program and higher consulting expenses for our quality assurance program.

Stock based compensation expense for the first quarter was $0.4 million as compared to $0.5 million for the year-ago period. Selling general and administrative expenses for 2019 and 2018 first quarters were $9.9 million and $4.9 million respectively.

The $5 million year-over-year increase reflects higher payroll and related expenses, marketing, travel, and conference expenses primarily related to Mirataz as well as increased expenses incurred by our Kansas plants in the lead up to its commissioning. In addition, higher corporate infrastructure costs and stock based compensation expense also contributed to the rise in expenses.

Stock based compensation expense was $1.4 million for the quarter versus $1 million in the year-ago period. As of March 31st, we had $96 million in cash, cash equivalents and investments compared to $73.9 million as of December 31st, 2018.

The balance includes net proceeds of approximately $43 million from our January public offering. Net catch use in operating activities for the first quarter was approximately $18.7 million.

We also invested approximately $2.7 million in capital expenditures for the remaining portion of the buildout of our Kansas Elwood Kansas manufacturing facility and the purchase of associated lab and manufacturing equipment by the facility. As Richard mentioned, 2019 is the catalyst rich year for KindredBio.

The initiation of multiple pivotal studies will move core programs into the final stage of development. We are also preparing for the launch of our second drug and completing the build-out of our Kansas biologics facility.

While we are committed to making the necessary investments to capture the full value of our pipeline, given the approval of Mirataz EU is no longer expected in 2019; we are revising down our 2019 operating expenses. We now expect full-year OpEx of between $57 million to $59 million excluding the impact of stock-based compensation expense and acquisitions if any.

Capital expenditures remain unchanged between $8 million to $10 million as we invest in lab and manufacturing equipment for our biologics program and build out the remaining portion of our Kansas facility. We are pleased to have timed these outlays such that the plant will come online at the same time as the maturation of our pipeline.

Given our quarter and cash balance, we believe we are fully funded into early 2021; this coincides with anticipated readouts from multiple pivotal programs throughout that year. As mentioned before, we have the ability to gate some of our early stage programs and associated expenses to prolong our cash runway.

In addition, as a commercial revenue generating company and with the plant and equipment as assets we are continuing to evaluate opportunities for non-dilutive capital. So, we believe we're in a strong financial position to achieve our corporate milestones.

With this I will turn the call back to Richard.

Thank you, Wendy. Operator we are ready for questions.

Hi, thanks for taking my questions, I had a few. Firstly, on your atopic dermatitis pipeline, so obviously a very interesting and novel and I think there's a lot of values to be unlocked there.

Would it be through yourselves or with a partnership? You mentioned you're getting some inbound interest, so how do you think about potential partnerships there is a partnership agreement, is it just being held back by meeting of the minds and economics or differing views in terms of where's the best stage in development to monetize that.

Secondly, maybe could you provide some color on the bridging studies required for Zimeta oral and then lastly just any price sensitivity you saw during the quarter from Mirataz, I know you mentioned last quarter you had not seen any just any update there? Thank you.

Great. Well, I'll take the first question and then you can take the other two.

So, on the atopic dermatitis, we are flexible; there are several ways we can structure a deal. We can structure a co-development and a co-commercialization deal or we can structure a strictly commercialization deal.

Ideally, what it would look like would be that we would utilize our salesforce as well as the salesforce of the partner to market these products and really it's not a matter of economics so much as try to decide when the right time is when the right amount of the risking has taken place. So, and also what the right characteristics of the partner are.

So, there's several partners that are interested, so we're -- so deciding which would make the best partner in terms of the cultural fit; their marketing abilities; and so forth.

Brandon it's Denise; I'll take the next two questions. So, as far as the bridging studies for dipyrone oral, we have had meetings with FDA and we have agreed on a path forward as I mentioned earlier and I won't get into the exact details but what I can tell you is FDA was very reasonable about these.

It's a very straightforward pathway and similar to a protocol concurrence if you will where if we do these steps and then we shouldn't have any issue. One thing I should note is we are gating some of these activities into 2020 based on as Wendy described to the reduction in OpEx.

So, we've prioritized some other things but we will be lining up these studies and plan to complete them in 2020. As far as pricing sensitivity, we have not seen any concern with this, I mean the move out from distribution into clinics is still quite good and anecdotally as well we have not had any pushback on the price increase.

Great, thanks so much. Maybe one more if I you don't mind?

Sure.

We saw Wal-Mart announced this week that it's moving into the online pet pharmacy with prescriptions. In the past, you guys have always talked about partnering with the vet and to sell your products.

How do you view how the animal health prescription landscape is shaping up in terms of how your products and your pipeline may be so just given that dynamic of more people moving to this online marketplace. Thank you,

Yes, sure. I think that's an excellent question.

I think the products that are the most vulnerable are oral products where there are lot of substitutable products; clean-tech or other products like antibiotics where there are multiple products that do similar things. For us, people moving more to the online pharmacies is an advantage because our products for the most part are unique and our biologics are largely administered by the veterinarian.

So, that actually makes our products more attractive to the veterinarian and so net/net I think you will be in a better position as companies like Wal-Mart take that approach.

Great, thank you very much.

Good afternoon, guys. Thanks for taking the questions.

First off from me, you mentioned that there is a move-out gross from Q4 to Q1 is still going in the proper direction. Any chance you could share what that looked like sequentially on the move outside?

Yes, it's a little unusual to share move out. I can assure you that we've seen growth in that but to get into specifics that would be something that would then be a benchmark for all the rest of our products into eternity.

So, at this we're not really prepared to share that.

Okay, understood. And then, just looking at that percentage of revenue going to the proportion of distributors that you guys are dealing with, it looks like in the September quarter last year was about 80% going to the top four distributors and then this quarter it looks like 87% to distributors.

Is that kind of a sign that maybe two distributors that were a big portion in Q3 of last year really didn't order much in Q1 or what's the right way to think about that?

Sure. So, yes.

So, what happened was towards the end of the year as you probably know there was some movement in which distributors would take over corporate accounts. So, there were some movement on the corporate account level and as a result, one of the larger distributors ordered quite a bit to be in prepared for that.

And so, well we had hoped to see that move out early in Q1. It took the bulk of the quarter to move through that inventory, so that's why you are seeing that.

Okay, that makes a lot of sense.

Q2, yes Q2 should look could be on different as far as distribution, you'll see a much more even distribution like you've seen previously.

And then, kind of lastly on this topic. I guess, the did you telegraph the price increase prior to the end of the year or was it and so people maybe order distributors maybe ordered or Pegasus maybe ordered I guess as well more in Q4 impacting Q1 as well?

So, contractually the distributors know 90 days in advance.

Okay, got you. And then, just turning to the pipeline and specifically epoCat, have you conducted any kind of market sizing strategy?

Is there I know you've mentioned that a few of these have a potential will look like kind of human drug revenues but just knowing that transfusions if there is a cat that is that the clinic that is able to provide a transfusion. Maybe that's $200 $300 to the pet owner at a minimum, if it's a prepackaged cold blood or some type of prepackaged frozen fluid.

It is more than that, the short shelf life, that can be $500 and up. Presumably it'd be a pretty high, you could achieve a pretty high price but thinking about capturing the markets for these anemic cats being that there's half of the other cats that have a sort of issue.

I guess what's your kind of market sizing there or any anything that you could share in terms of where you feel is the opportunity would be great?

Yes, sure. So, we know from epidemiological data that there are a lots of cats out there, millions of cats.

So, we know that the potential market is very large, if every cat that needed this drug, got it it could be very large. It's more difficult to estimate what the penetration will be.

So, it's a very broad range, right? Now if there is 7 million cats that could potentially use it, if that'd be a 5% cut cutted versus 10%m, it's very different.

Our best cat is that this is a market that will grow over time and eventually could become quite big. But currently, there really isn’t the market because the human relative poisons are I mean genetic.

So, I think whereas in similar situation as let's say the paying market or the topic dermatitis market was before really taking effective drugs launched. Now before Rimadyl launched or before Apeco launched, the market looked very small.

And then, after a good drug was approved, the market turned out to be quite big. So, that’s what we think is possible but I think we won't know until 1) we have the final clinical data from our pivotal studies and 2) until we frankly launched the product.

Okay, that's fair enough. Thanks for the thoughts there and thanks for taking the questions, I'll jump back in queue.

Thanks, Ben.

Hi, thank you. Hi, guys.

Hello.

Okay. So, I have two questions and they're in different areas.

So, one is on the task compliance and then the second one is on oncology. But on Mirataz compliance, there's some safety label around wearing gloves, washing hands.

You have three quarters of sales behind you. Do you find a feedback through the vet channel I'm talking to, the pet owners that they're fine with the way that they administer Mirataz to cats and that was looking good?

Yes. Yes, we do.

Yes, we haven’t had any pushback, we haven’t had anything even through our customer service line to indicate that and it does not, it virtually doesn't come up when we're talking to veterinarians. And it's not uncommon to have that labelling for other topical products.

So, veterinarians and cat owners are used to it.

Okay, thanks. And then the second one on this other subject on oncology, just based on recent yield that we saw take place in the space and then even outside the space in terms of diagnostic players who are looking at the oncology marketing canine.

We talked about this in the past but I was just curious if you guys was thinking has changed maybe in the last couple of quarters or even now like the way you're looking at how the oncology market might develop for companion animals.

I think it hasn’t changed. Our thinking is that it's a large potential market, as long as you have a very effective drug.

So, we think it's different from the human market where the human side if you have a drug that extends survival by let's say a couple of months, then you can have a very successful drug. We think that in the veterinary market if you have a drug that extends survival by a year or two or results in let's say 30% or 40% cure such as you might see with checkpoint inhibitors, then you could have a very successful drug.

Because there are actually a 6 million cats and 6 million dogs that get cancer every year compared to 1.7 million people who get cancer every year. So, there is a lot more pets that get cancer.

And that's because even though you have about a 3rd of humans, cats, and dogs get cancer, dogs and cats live for shorter period of time. So, the annual incidence is higher.

So, it's a very large market but we think the products have to have a very good profile.

Thank you. That's helpful.

Hi, good afternoon and thanks for taking my question. This is Manam jumping in for Andy.

And I was hopping in-between calls, so I apologize if you hit on these topics. I'll start with Zimeta.

Can you touch on what you've learned with the process with the FDA for the candidate and what can be done to push them or keep in honest as it relates to dipyrone that do for timelines?

Yes. So, we obviously we always learn from every step with the way on every program and take those learnings into future programs.

But one of the challenges with Zimeta is dipyrone it's manufactured by very few manufacturers and it's not a product that's available in the United States. Which has its advantages certainly from a competitive standpoint.

However it limits the number of API providers. So, that's one of the considerations for Zimeta.

What we have learned of course is if the FDA misses in a due for date, there is very little incentive than to stay on task which is largely why we filed our NADA. So, as you may recall back in the fall, we resubmitted our NADA to close that out and put it back on in a due for timeline.

So, we're excited because that's coming up very shortly and we're hopeful for a positive outcome from that.

Great. And then, just staying in that vein, you previously mentioned that you had identified the appropriate sales rep for the equine of the business.

Is that still true today or is or as this re-inspection process resulted in potential lost human capital opportunities?

You would think it would have but I'll tell you we have a couple of the top equine industry folks on our team. And that is still attractive to those who are waiting in the wing.

So, I'm really -- and I check on this all the time. Why Apeco had a commercial all the time and we lost any ground but we certainly have in.

And also, with our pipeline in equine and the veterinary sentiment for KindredBio within equine. As you can imagine, we've had a lot of time for equine veterinarians to get to know KindredBio.

And we'll be launching this product in tandem with the AAEP the American Association of Equine Practitioners this year. So, we're very excited about the talent that's to come on the team.

Thank you. That's helpful.

A final question related to getting the Mirataz label expansion. Have you narrowed down whether identification that could be for you.

And can you please educate me on the regulatory and commercialization process difference between a label expansions versus introducing a new product?

So, we have identified the indications but we have not disclosed it. And the approval process is similar to label extension for the human side.

We wouldn't have to file a new CMC section but we would have to file a new efficacy section and then safety would depend on whether the duration of therapy was the same. If you are longer, then we would have to file a new safety faction as well.

Got it, okay. Thank you for the color and good luck to see you.

I'll hop back in the queue.

Thank you.

Thank you.

Thank you. Thank you, for taking my questions, Richard and Denise.

A couple of quick questions. The first one is when you're talking about Mirataz revenue for this quarter, you were highlighting some of this institute is associated with what's what could be happening.

And that I have at least note couple of them here, so I just wanted to see how important these are and how are you tackling some of these. One of them was about for coaching is where that's taking a little bit longer to get away from the generic or monitor to Mirataz.

And other or is about something about salesforce numbers. And the -- I know your strategies it start slow and build it up step-by-step.

Does this quarterly decline go, it's not specifically it's not an it's just one quarter doesn't make everyone a data point. How were you thinking about this two factors at this time?

Sure. Yes, thank you for that.

So, we obviously we talk about this quite a bit internally and we feel like we struck the right balance of commercial investment given that we have a single product in our bag because again don’t forget I mean this pipeline is so rich and when you balance out really increasing commercial spend for a single product versus what's to come in the value of these products, it's hard to make the argument. And likewise as you know more than anyone, we built a phenomenal amount of value in this company by build -- we're soon to have a two fully commissioned state-of-the-art manufacturing plans, again the pipeline that I've referenced on a number of occasions, so it really is a balancing act.

And one of the things that is very exciting about this business model and it's something that we said from day one is the ability to stretch runway. We have a number of programs and so we're really able to titrate to where we are at any given moment and we have a team in place to do that.

So, at this point we don’t anticipate changing the numbers of the sales reps but what we are doing are some really exciting educational programs and initiatives that will amplify their voice in a cost efficient way and that's really important. And to your original question about protocol changes, yes, I mean that also falls into education where compliance is so important to the success of these cats looking at an unintended weight loss as the severe condition that it is and taking a holistic approach to that cat is really important.

And we've already noticed some of these early education initiatives that's starting to resonate.

Thank you Denise for that. Regarding the conversations with the DMA and them asking such a lot of here in September of 2019, where you said that after that hearing you would have an idea of what is the extent of additional data that during that we require.

So, that's what are you telegraph to us and you said more clinical data or is it some additional non-clinical and maybe CMC sort of data. So, what are you talking about here?

Sure. So yes, we're not a 100% sure that we'll have to address or generate any additional data and of course not sure of the extent to which we would have to if we do in fact need to.

So, the way it works with the EMA as you have a country who is your initial repertoire, your initial reviewer and then when you go to oral hearing the other countries where they participate. And so, we have opportunity to go over the data that we do have and really hone in on if there is any additional data needed.

At this point, we certainly don’t think anything is insurmountable and we see a path forward for this approval but we really won't know the extent of that until after the oral hearing. And at that point we will certainly be more transparent the extent of it and the timelines associated.

Okay, thank you for that. And the last question from me is on the Zimeta IV.

You're stating that when FDAs use the sending FDA at the review of the manufacturer's responses, we should have getting enough to work. So, does that mean the manufacturer has already responded to the FDAs request and I believe there was some kind of a timeline to that the FDA was not visiting with the manufacturer?

I'm kind of a little bit murky on that part of the story but just trying to understand where is it right now. If the FDA the -- FDA reviews that too either the manufacturer response ratio, there is a bottleneck.

Yes. You're not, you're actually not as murky as you think you are.

So yes, so we again we took with the NADA which forces a due for timeline. And the inspection of the plant did come late in that timeline.

So, but within the timeline, so they've inspected the plant, they provided the report and the API manufacturer has already responded to that. So, like I said we're anticipating approval very shortly and we have inhered otherwise from FDA at this point but of course we will disclose that one way or other once we know.

Thank you for taking all my questions. Good luck and talk to you soon.

Thank you.

Thank you.

Thank you, operator. We have a lot of milestones that position 2019 as a transformational year for KindredBio.

Just in the next few months we expect a second FDA approval and study results for IL-31. Throughout the remainder of the year, study results across other key pipeline candidates with blockbuster potential the initiation of pre-pivotal studies, growth in Mirataz revenues and commissioning of our Kindred biologic facility and with this and KindredBio is charming.

As always, we would like to thank you for your support, I look forward to providing many exciting update to 2019.